Does Slate Financing Work?
+ accelerate recoupment with creative distribution strategies
A couple of newsletters ago I talked about scaling up your financing aka stretching your equity with structured finance methods like soft money, pre-sales, and debt. In a time when it’s getting tougher to make a business case for investing in feature films, I’m seeing investor recoupment success on the fringes…. either micro budgets or bigger budgets with only 10%-30% exposure to equity.
A topic that has been bandied around lately and that I’m starting to see more and more first hand is indie slate financing. Basically where an investor spreads their risk across multiple projects, either films, series, or both. That way, they aren’t single source dependent and you commit to extending their timeline out to 5-8 years (or longer), with the idea that they will begin recoupment from the first film that makes it to distribution…. or in the case of development, the first film that makes it into production.
I’m experimenting with some creative deal making right now on that front for my own projects and advising clients on it as well. To be clear, slate financing isn’t anything new and the studios have been doing it for all their existence, but it turns out adapting that model to indies could be a wise move as traditional recoupment methods become more elusive.
While creating sales estimates for a single film can look bleak, numbers start to add up over the course of multiple projects. It’s also incredibly difficult to predict what your revenue will look like early on in the process before you have all your cast attached and have a better idea of project market value. So in the mean time it can help to find investors who have faith in you and your team and want to go along for the ride with you over the medium to long term.
Creative Distribution For Series
Another topic to discuss on the subject of financing is how to protect your investors’ downside by leveraging creative distribution strategies on low to mid budget series.
A strategy that makes sense for the current market where we’re seeing cancellations, clawbacks, and fewer commissions overall is to adapt a series financing model that is similar to low budget indie filmmaking.
This works particularly well for unscripted/doc series where you aren’t having to pay for star writing and acting talent. On a couple unscripted projects I’m working on we’re capping budgets in the $1-$3 million range for the entire series to ensure there’s a path to recoupment even if we had to rely on only AVOD and FAST distribution over the long tail, plus some creative use of extending monetization across a companion YT channel that is an extension of the series.
In short I think if you’re willing to get creative with distribution and have the expertise in that area, films and series aka entertainment media can actually become a worthwhile investment vehicle vs. a money pit for equity investors.
How do you all feel about multiplying your equity with structured financing tools and accelerating recoupment for your investors?
Are any of you planning creative financing and distribution for independently produced series?
Email me at stacey@filmspecific.com or let me know in the comments below what you want to dive deeper on…
Have a wonderful rest of the day and speak to you again soon!
Stacey
++++++++++++++